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U.S. natural gas futures fell to the lowest in nearly four years on Tuesday, weighed by forecasts for milder weather than previously expected during the next two weeks and plenty of gas in storage.
The low amounts of gas flowing to U.S. liquefied natural gas export plants due to work expected to continue through May at Freeport LNG's export plant in Texas also keep prices held down, according to Reuters.
Front-month Nymex natural gas (NG1:COM) for April delivery closed -2.5% to $1.575/MMBtu after dipping as low as $1.481/MMBtu, its fifth consecutive loss and lowest settlement value since June 2020, down 37% YTD.
Despite the drop in the April contract, futures for May - which is poised to become the front-month - were little changed at ~$1.79/MMBtu.
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"Weather-driven demand for natural gas is set to drop... over the next two weeks," analysts at energy consultant EBW Analytics write. "With LNG feedgas demand wavering... the low-demand shoulder season may prolong recent price weakness for natural gas."
Some cold weather in early April could help lift demand, but "the fact we're not going to have full LNG feedgas until sometime in mid-May is overhanging the market," according to Tradition Energy director of market research Gary Cunningham.